Rise of the Robots: Technology and the Threat of a Jobless Future, by Martin Ford
"I'm smart; you're dumb. I'm big; you're small. I'm right; you're wrong. And there's nothing you can do about it."Thus spake Harry Wormwood in the movie "Matilda". This well could be the message that robots will have for us in the not too distant future. The dramatic improvements in the speed, the accuracy, and the areas in which computers have begun to comprehensively outperform humans leads one to believe that while a so-called singularity may well be some ways off, the more immediate effects of this automation are already being felt in permanent job losses. In a country like India, which has used digital technologies quite effectively in the last decade and a half to grow a $150 billion IT-BPM industry, the impact could be devastating - especially where an estimated 10 million people are employed.
In many spheres - chess for example - they could utter these lines to us humans today and there's nothing we can do about it - for the computer is right. The puniest of computers in the tiniest of smartphones possesses enough computing horsepower and smart-enough algorithms (written by us humans - oh yes, the irony!) to defeat the best of us humans in chess, every single time, without breaking a sweat. Computers have been able to add, subtract, divide, square, multiply faster and more accurately than us for decades now, and there's nothing we can do about that either.
From the time of the Luddites - who rose up against the machines of the Industrial Revolution in the early years of the nineteenth century - to the present-day "Judgment Day" Sarah Connor avatars, inspired as much by an acute awareness of the march of technology as by James Cameroon's "Terminator" movies, the refrain of the chorus has been more or less unchanging: the machines are coming for our jobs, our livelihoods, and will finally come for us (the Matrix was premised on a variant of one such dystopian future). Computing power of computers exploded in the second half of the twentieth century, obeying the inexorable pull of Moore's Law, and made feasible by advances in semiconductors, fabrication techniques, and electrical engineering. As did fears that similar software advances could somehow endow machines with intelligence - Artificial Intelligence. These fears however did not quite come to pass. For several decades, there were several false hopes and starts that were kindled and then extinguished. Till this decade. The congruence of seemingly infinite computing power - thanks to massive server farms running in the "cloud" (a mangled metaphor if ever there was one), cheap and lightning fast bandwidth available on tap, storage and memory that keeps getting impossibly cheaper every year, and sophisticated software algorithms - has however made it clear that "machine intelligence" is no longer an oxymoron. We are well and truly living in the middle of the machine age. The "singularity" may well be witnessed in our lifetimes, within a decade or two even.
Martin Ford's book, "The Rise of the Robots: Technology and the Threat of a Jobless Future" lays out the case for a not-so-distant future where machines make possible the automation of almost every task imaginable, but at a great social and economic cost. The book is neatly organized, lucidly argued, and except for a lengthy and somewhat incongruous chapter on the medical system, the book stays on point. Ford makes it clear that neither is this technological progress reversible, nor wholly desirable. Its consequences therefore cannot be wished away - income inequality as an example, which economists for three decades have been explaining away as a temporary anomaly. The last section, which is more contemplative and prescriptive, as opposed to the earlier sections which are descriptive, discusses possible solutions, some of which will shock free market proponents. Whether there are more practical, workable answers is quite another thing though.
Some years back, when offshoring was in the news and concerns about its impact on US jobs was at its peak, with hundreds of thousands of jobs moved offshore to countries like India, there were stories coming out regularly, like the one about Southern California workers being made to train H1-B visa holders, many of whom took over their jobs. Pfizer made "hundreds of tech workers at its Connecticut R&D facilities" train their replacements - guest workers from India. If the economics of labor cost arbitrage precipitated the migration of skilled technology jobs away from the United States and to countries like India (being "Bangalored" entered the urban lexicon only a decade ago), technology could plausibly bring those jobs back to the United States - call it "reshoring". The quantum of jobs reshored, however, is going to be a massive disappointment. Consider this: "In 2011, the Washington Post’s Michael Rosenwald reported that a colossal, billion-dollar data center built by Apple, Inc., in the town of Maiden, North Carolina, had created only fifty full-time positions." But it is precisely this elimination of the need for many people that makes the economics of reshoring work out. Ironical.
While the United States can at least look forward to the reshoring of some jobs lost to manufacturing in China or services in India, the loss of such jobs is certain, on the other hand, to cause greater upheaval in these offshore countries. India's socio-economic progress is predicated in great deal on a re-skilling of its labour force to take advantage of an emerging "Digital India" both in the manufacturing and services sector, but which is in mortal danger of being blindsided by the rise of the machines. The use of IT-based services as a catalyst for driving economic growth in smaller - Tier B and Tier C - cities in India is a recurrent theme for planners. But this could be short-circuited by the rise of the robots, who, once trained - by humans - can perform the jobs of humans, better, and faster. Indians were trained by their American counterparts to do their jobs. Unbeknownst to many, these people are actors in the same offshoring saga that played out a decade ago, but with the proverbial shoe on the other foot now.
"The bottom line is that if you find yourself working with, or under the direction of, a smart software system, it’s probably a pretty good bet that—whether you’re aware of it or not—you are also training the software to ultimately replace you."India has been a spectacular laggard when it has come to industrializing its economy - it is probably unique among all developing nations to be progressing (or at least with ambitions of progressing) from a primarily agrarian economy to a services-based economy, skipping substantially the intermediate phase of industrialization that every single industrialized nation went through last century. It was industrialization that provided the bedrock for the middle-class in nations, which then aspired towards a better quality of life, with the ability to pay for it - thus driving the move towards a services-based economy. For India, it could be argued by some that this skipping may prove to be a blessing, since an industrialized economy is more susceptible to efficiencies wrought by advancements in technology. Consider these examples from Ford's book:
1. "in the United States, chickens are grown to standardized sizes so as to make them compatible with automated slaughtering and processing."
2. Momentum Machines, a San Francisco based startup has developed a machine that "shapes burgers from freshly ground meat and then grills them to order - including even the ability to add just the right amount of char while retaining all the juices. The machine, which is capable of producing about 360 hamburgers per hour, also toasts the bun and then slices and adds fresh ingredients like tomatoes, onions, and pickles only after the order is placed."
The company's co-founder is clear that these machines are not "meant to make employees more efficient... It's meant to completely obviate them."
3. "Vision Robotics, a company based in San Diego, California, is developing an octopus-like orange harvesting machine. The robot will use three-dimensional machine vision to make a computer model of an entire orange tree and then store the location of each fruit. That information will then be passed on to the machine’s eight robotic arms, which will rapidly harvest the oranges."
4. "Researchers at Facebook have likewise developed an experimental system—consisting of nine levels of artificial neurons—that can correctly determine whether two photographs are of the same person 97.25 percent of the time, even if lighting conditions and orientation of the faces vary. That compares with 97.53 percent accuracy for human observers."
5. "A Facebook executive noted in November 2013 that the Cyborg system routinely solves thousands of problems that would otherwise have to be addressed manually, and that the technology allows a single technician to manage as many as 20,000 computers."
"In 2010, the Northwestern University researchers who oversaw the team of computer science and journalism students who worked on StatsMonkey raised venture capital and founded a new company, Narrative Science, Inc., to commercialize the technology. The company hired a team of top computer scientists and engineers; then it tossed out the original StatsMonkey computer code and built a far more powerful and comprehensive artificial intelligence engine that it named “Quill.”
"To keep instructional costs down, colleges are relying ever more heavily on part-time, or adjunct, faculty who are paid on a per-course basis—in some cases as little as $2,500 for a semester-long class—and receive no employee benefits. Especially in the liberal arts, these adjunct positions have become dead-end jobs for huge numbers of PhD graduates who once hoped for tenure-track academic careers."
... One of Narrative Science’s earliest backers was In-Q-Tel, the venture capital arm of the Central Intelligence Agency"
"To keep instructional costs down, colleges are relying ever more heavily on part-time, or adjunct, faculty who are paid on a per-course basis—in some cases as little as $2,500 for a semester-long class—and receive no employee benefits. Especially in the liberal arts, these adjunct positions have become dead-end jobs for huge numbers of PhD graduates who once hoped for tenure-track academic careers."
8. "In July 2012, the London Symphony Orchestra performed a composition entitled Transits—Into an Abyss. One reviewer called it “artistic and delightful.” The event marked the first time that an elite orchestra had played music composed entirely by a machine. The composition was created by Iamus, a cluster of computers running a musically inclined artificial intelligence algorithm."
As one goes over these examples, it becomes obvious that automation is a sword that cuts both ways. Is India equipped - and more importantly, are the planners aware - to handle the flood of automation that could wash away entire swathes of jobs being dreamed up by ambitions of a digitally-enabled nation?
As 2014 drew to a close, the Indian IT industry was rocked by rumours that TCS (the largest Indian IT company by annual revenues) had completed an internal review and had initiated lay offs of thousands of employees - mostly in middle management. Some stories talked about a number as high as 30,000. The saga finally ended with a round of clarifications and denials by TCS and some well-deserved opprobrium over its inept handling of the needless controversy. What the fracas however served to highlight was a stark truth that's been staring at the Indian IT industry for some time now - the skills that the typical Indian IT worker possesses are mostly undifferentiated and prime candidates for automation.
What is worse, from at least one perspective, is the fact that (smart) humans have built technology that has becoming adept at "engineering the labor out of the product." One will need to be particularly myopic to not also recognize that "the machines are coming for the higher-skill jobs as well." This much should have been clear in part two of this series, through the examples I cited from Martin Ford's book.
One recurring theme in Martin Ford's book, "Rise of the Robots", at least in the initial chapters, is the permanence and acceleration of offshoring to countries like India, which he believes, "has built a major, nationally strategic industry specifically geared toward the electronic capture of American and European jobs." (As an aside, most Indians would be somewhat puzzled by this assertion, given at times the outright hostility which politicians in India display towards the IT industry, like the time when a former prime minister indirectly accused the Bangalore IT industry of "immoral, unethical and illegal prosperity"!) Anyway, leaving that aside aside, in advancing his argument Ford posits that as "powerful AI-based tools make it easier for offshore workers to compete with their higher-paid counterparts in developed countries, advancing technology is also likely to upend many of our most basic assumptions about which types of jobs are potentially offshorable. Nearly everyone believes, for example, that occupations that require physical manipulation of the environment will always be safe."
Ford believes that the development of a digital infrastructure in India and the advancement of AI and related technologies will make things worse for US (and Europe) jobs. True to some extent though that may be, you have to consider the fact that increasing automation makes it cheaper and less labor-intensive to maintain, run, and patch-and-upgrade software applications. Furthermore, any offshoring of jobs adds its own overheads by way of administrative and managerial redundancies that cannot be done away with. Automation efficiencies reduce the need for labour, which is the often the single biggest component in any software application over its entire life. Therefore, the very factors that Ford fears are threatening to make offshoring permanent and more widespread are also likely to make reshoring financially viable. It's a sword that cuts both ways.
To be fair, the digital economy in India has a lot of headroom to grow; especially as the Indian government's Smart City initiative brings e-governance and services to the common man through the Internet and technologies. This could well provide a second wind to the Indian IT industry for a decade or more.
However, it is a smart strategy to keep one eye on the what the winds of such a digital nirvana may blow in. An indicator of the direction in which the Indian IT job market is likely to evolve therefore can be found by looking at the US, where the "propensity for the economy to wipe out solid middle-skill, middle-class jobs, and then to replace them with a combination of low-wage service jobs and high-skill, professional jobs that are generally unattainable for most of the workforce, has been dubbed "job market polarization.""
This phrase - "job market polarization" should give us a fair indication of what is in store for the hundreds of thousands, even millions, of graduates in India, many of whom emerge today out of college with a stark degree of antipathy for doing the "9-5" grind that they saw their parents and its generation go through. Digital "start-up" nirvana beckons for them. Each sees himself as a digital entrepreneur of the new economy. They are ready to chuck the "dependable income stream that anchors them into the middle-class" - they view it not as an "anchor" but more a millstone. However, the vast majority is likely to find itself stuck in what "techno visionary" Jared Lanier calls the "informal economy that is found in third-world nations." It's a tiny minority that will "live at the extreme left of the long tail" of such a digital economy. For every Flipkart or SnapDeal (the final word on that fairy-tale saga is yet to be written), you will find tens of thousands of resellers at the other end of the payoff tail, paying these e-tailers money every month for the privilege of selling on their platforms, at prices that barely cover operating costs.
The Indian middle-class, for all its flaws, has represented for decades an aspirational lodestar for the vast majority of the country's poor. So what happens when the digital economy hollows out the middle of the job market - "job polarization" as described above? Again, we can look westwards for possible answers.
"In an analysis published in February 2014, MIT economist James Poterba found that a remarkable 50 percent of American households aged sixty-five to sixty-nine have retirement account balances of $5,000 or less. According to Poterba’s paper, even a household with $100,000 in retirement savings would receive a guaranteed income of only about $5,400 per year (or $450 per month) with no cost-of-living increases, if the entire balance were used to purchase a fixed annuity."
What is worse, from at least one perspective, is the fact that (smart) humans have built technology that has becoming adept at "engineering the labor out of the product." One will need to be particularly myopic to not also recognize that "the machines are coming for the higher-skill jobs as well." This much should have been clear in part two of this series, through the examples I cited from Martin Ford's book.
One recurring theme in Martin Ford's book, "Rise of the Robots", at least in the initial chapters, is the permanence and acceleration of offshoring to countries like India, which he believes, "has built a major, nationally strategic industry specifically geared toward the electronic capture of American and European jobs." (As an aside, most Indians would be somewhat puzzled by this assertion, given at times the outright hostility which politicians in India display towards the IT industry, like the time when a former prime minister indirectly accused the Bangalore IT industry of "immoral, unethical and illegal prosperity"!) Anyway, leaving that aside aside, in advancing his argument Ford posits that as "powerful AI-based tools make it easier for offshore workers to compete with their higher-paid counterparts in developed countries, advancing technology is also likely to upend many of our most basic assumptions about which types of jobs are potentially offshorable. Nearly everyone believes, for example, that occupations that require physical manipulation of the environment will always be safe."Ford believes that the development of a digital infrastructure in India and the advancement of AI and related technologies will make things worse for US (and Europe) jobs. True to some extent though that may be, you have to consider the fact that increasing automation makes it cheaper and less labor-intensive to maintain, run, and patch-and-upgrade software applications. Furthermore, any offshoring of jobs adds its own overheads by way of administrative and managerial redundancies that cannot be done away with. Automation efficiencies reduce the need for labour, which is the often the single biggest component in any software application over its entire life. Therefore, the very factors that Ford fears are threatening to make offshoring permanent and more widespread are also likely to make reshoring financially viable. It's a sword that cuts both ways.
To be fair, the digital economy in India has a lot of headroom to grow; especially as the Indian government's Smart City initiative brings e-governance and services to the common man through the Internet and technologies. This could well provide a second wind to the Indian IT industry for a decade or more.
However, it is a smart strategy to keep one eye on the what the winds of such a digital nirvana may blow in. An indicator of the direction in which the Indian IT job market is likely to evolve therefore can be found by looking at the US, where the "propensity for the economy to wipe out solid middle-skill, middle-class jobs, and then to replace them with a combination of low-wage service jobs and high-skill, professional jobs that are generally unattainable for most of the workforce, has been dubbed "job market polarization.""
This phrase - "job market polarization" should give us a fair indication of what is in store for the hundreds of thousands, even millions, of graduates in India, many of whom emerge today out of college with a stark degree of antipathy for doing the "9-5" grind that they saw their parents and its generation go through. Digital "start-up" nirvana beckons for them. Each sees himself as a digital entrepreneur of the new economy. They are ready to chuck the "dependable income stream that anchors them into the middle-class" - they view it not as an "anchor" but more a millstone. However, the vast majority is likely to find itself stuck in what "techno visionary" Jared Lanier calls the "informal economy that is found in third-world nations." It's a tiny minority that will "live at the extreme left of the long tail" of such a digital economy. For every Flipkart or SnapDeal (the final word on that fairy-tale saga is yet to be written), you will find tens of thousands of resellers at the other end of the payoff tail, paying these e-tailers money every month for the privilege of selling on their platforms, at prices that barely cover operating costs.The Indian middle-class, for all its flaws, has represented for decades an aspirational lodestar for the vast majority of the country's poor. So what happens when the digital economy hollows out the middle of the job market - "job polarization" as described above? Again, we can look westwards for possible answers.
"In an analysis published in February 2014, MIT economist James Poterba found that a remarkable 50 percent of American households aged sixty-five to sixty-nine have retirement account balances of $5,000 or less. According to Poterba’s paper, even a household with $100,000 in retirement savings would receive a guaranteed income of only about $5,400 per year (or $450 per month) with no cost-of-living increases, if the entire balance were used to purchase a fixed annuity."
In other words, in the absence of both a retirement corpus and a government guaranteed pension, there is a real risk of an emergent middle-class sliding right back into the working poor or even the underclass - a recipe for social unrest.
An inevitable counter-argument to all this unease generated by the "rise of the robots" is the "humans are underrated" palliative. Championing this is Tom Davenport (of "Competing on Analytics" fame) who now talks of "amplified intelligence" (which unfortunately has more the stench of a seo-optimized buzzword than anything substantial at this point) - where "smart" humans work to "augment" "smart" machines. Then there is also Geoff Colvin, who penned the insightful 2008 book, "Talent Is Overrated", and who has returned with "Humans Are Underrated". I have yet to read Colvin's latest book, so judgment day is reserved on the book, but to Davenport's argument, some of the evidence suggests an easy refutation - "In his 2007 book Super Crunchers, Yale University professor Ian Ayres cites study after study showing that algorithmic approaches routinely outperform human experts. When people, rather than computers, are given overall control of the process, the results almost invariably suffer." In many fields where algorithms rule the roost, to argue for human "augmentation" or "amplification" is no better than to argue for more cooks to brew the broth - we know that aphorism, don't we?
In conclusion, and in many ways, the saga documented in "Rise of the Robots" calls to mind the ancient Indian tale of the four friends:
In ancient India there lived four friends. Three of them were very learned, while the fourth was a simpleton, even considered a fool. The four decided to go to the capital and seek their fortune from the king. Along the way, while passing through a jungle, they came across the bones of a lion long dead. The first friend used his knowledge to assemble the bones into a skeleton. The second friend used his skills to fashion a skin over the skeleton, while the third prepared to bring the lion back to life. At this the fourth friend - the simpleton - warned his other three friends of the perils of doing so, and was roundly rebuked by the three, wiser friends. The simpleton again warned them and upon being ignored, climbed a tree for safety. The third friend used his knowledge to breathe life into the lion. I don't need to tell you how this tale ended for the three wise men.
And I will end here.
Hardcover: 352 pages
Publisher: Basic Books (May 5, 2015)ISBN-10: 0465059996ISBN-13: 978-0465059997
US: Rise of the Robots: Technology and the Threat of a Jobless Future
India: Rise of the Robots: Technology and the Threat of a Jobless Future
This was first published in PerformanceGurus in three installments on Aug 8th, 13th, and 15th, 2015.
© 2015, Abhinav Agarwal (अà¤िनव अग्रवाल). All rights reserved.